The Market-based Lead Phasedown

The U.S. lead phasedown was effective in meeting its environmental objectives, and did so more quickly with the allowance of permit banking. The marketable lead permit system was highly costeffective, saving hundreds of millions of dollars relative to comparable policies not allowing trading or banking. Estimates suggest that transaction costs brought about only a modest reduction in program efficiency. The market-based nature of the program also provided incentives for more efficient adoption of new lead-removing technology, relative to a uniform standard. Distributionally, it is likely that the program was actually more responsive to the cost concerns of small refiners than a similar uniform standard would have been. The flexibility of the program likely increased the amount of violations, however, and added an unexpected monitoring and enforcement burden. On the other hand, one of the efficiency advantages of the incentive-based program is that it provided opportunities for unanticipated means of cost-effective compliance.


Issue Date:
2003
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/10445
Total Pages:
30
JEL Codes:
Q25; Q28; Q21
Series Statement:
Discussion Paper 03-37




 Record created 2017-04-01, last modified 2017-04-04

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